Report: Coronavirus Closures Could Cost 2.8M Jobs in SoCal


LOS ANGELES (CNS) - Business closures and cutbacks brought on by the coronavirus crisis could lead to a staggering 27.4% drop in employment across a 10-county Southern California region by May, equating to a loss of more than 2.8 million jobs, according to a study from the Los Angeles Economic Development Corporation.

The report by the LAEDC's Institute for Applied Economics noted that the estimates could fluctuate dramatically depending on the duration of stay-at- home orders and other variables, and thus “should not be used as an argument to reopen businesses or ease social-distancing requirements throughout the region.”

Based on current conditions, however, researchers determined that in a 10-county area stretching from San Luis Obsipo south to San Diego and stretching as far east as the Nevada and Arizona borders, the number of jobs could drop from 10.3 million last May to just under 7.5 million next month. That would equate to an unemployment rate of up to 31.4%.

The food and service industries would take the biggest hit, thanks to restrictions on restaurant operations, according to the report, which was released Tuesday.

“Due to the ban on dine-in eating and the resulting empty restaurants, those who find themselves out of work are waiters, servers, bartenders, chefs and cooks and more,” according to the report. “Employment in May 2020 may decline by 68.8 percent, year-over-year, in this major occupation group, potentially affecting close to 700,000 workers.”


Other sectors such as sales, office and administrative support are also expected to be heavily impacted.

The largest number of projected job losses is in the Los Angeles-Long Beach-Anaheim region, with a projected 1.7 million drop in positions, equating to a roughly 31.7% unemployment rate, according to the report.

In addition to food service and retail sectors, major job losses are also projected in the Los Angeles region in transportation thanks to travel restrictions and the drop in tourism, according to the report.

“However, the status of `Los Angeles' as a focus of national and international business activity means that there are also strong sectors in management, business and finance, technology, engineering and legal occupations,” the report states. “These will all withstand the pandemic with estimated job losses only around 5 percent on average, as most workers are able to transition to remote work.”

The LAEDC report comes on the heels of a study released last week by the USC Dornsife Center for Economic and Social Research that determined that more than half of Los Angeles County residents are out of work due to the pandemic.

The USC study found that roughly 1.3 million jobs were lost in Los Angeles County between mid-March and mid-April. Those job losses lowered the percentage of employed residents from 61% in mid-March to about 45% in mid- April, according to the report. Nationally, the employment percentage dropped from 62% to 52% over the same time period, the report found.

Photos: Getty Images

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